Tesla CEO Elon Musk announced the company’s intention to hold a shareholder vote to shift its state of incorporation from Delaware to Texas. This decision comes in response to a recent ruling by a Delaware judge invalidating Musk’s $56 billion pay package, deeming it “unfathomable” and unfair to shareholders. Musk, critical of Delaware’s regulatory environment, initiated a poll on social media, with over 87% of 1.1 million votes supporting the move to Texas.

Having relocated Tesla’s corporate headquarters from California to Texas in 2021, Musk emphasizes the state’s business-friendly environment. The move aligns with his previous criticisms of California’s regulations and taxes, coupled with disagreements over pandemic-related factory closures. Musk’s interest in Texas extends beyond Tesla, with gigafactories, a lithium refinery, and operations for his other companies like SpaceX located there.

While Delaware is a popular choice for company incorporations, Musk’s dissatisfaction with the state’s legal framework and tax policies led to this decision. Musk, no stranger to legal disputes in Delaware, previously faced a lawsuit related to his attempt to back out of a Twitter acquisition deal.

The recent setback in the Delaware court prompts Musk to recommend incorporating in Nevada or Texas for shareholder influence. Despite the pay ruling, Musk remains vocal about Tesla’s future, expressing discomfort with growing the company’s role in artificial intelligence and robotics without increased voting control.

As Tesla prepares for the shareholder vote, Musk’s entrepreneurial spirit and pursuit of alternatives highlight the dynamic nature of corporate decision-making. The company’s shares rose 2% in pre-market trading following Musk’s announcement.